A blog dedicated to exploring the practice of law before the internet. Heck, before good interstate highways for that matter.

Friday, November 28, 2014

Distributist of the world unite! National Small Business Saturday.

Saturday, November 29, is National Small Business Saturday, a holiday, of sorts, oddly enough thought up American Express. This follows what's come to be known as "Black Friday", the huge shopping day that sees many businesses go into "the black" for the first time all year, which is a bit of a scary thought really. The calendar year is almost up, which is the average businesses fiscal year, so it's spooky to think that a lot of businesses don't see a profit until now.

Black Friday is pretty recent in origin. Not all that long ago the Friday after Thanksgiving was just the Friday after Thanksgiving, and indeed a lot of people who weren't in retail would take it off, just like they take off Boxing Day, the day following Christmas. Now, however, that's no longer true and all sorts of sales and whatnot occur on that day, for both big business and small. That likely got started because retail establishments were aiming for the many people who took the day off, and apparently had nothing else to do. Now some stores even open at midnight of Thanksgiving Day, which is a bit of a sad thought.

American Express, in a move recognizing that even now a tremendous number of businesses are small businesses, decided that the day after Black Friday was a good day to focus on small businesses. They wisely chose to avoid focusing on that Friday itself, which is already dominated by sales euphoria, and which is also the focus of some philosophical backlash by people who note that perhaps that's taking consumerism a bit too far. A "stay at home" movement has existed for quite some time in reaction to Black Friday. As for me, if I'm not actually at work on that day (which I often am) I'm usually using it to try to catch up on elk hunting, or perhaps on goose hunting.

What I'm often doing on Black Friday.

Or where I otherwise am on Black Friday, if not. . . .

here.

That is, I figure, probably much more in keeping, I'd note, with where most generations of Thanksgiving Day celebrants were following Thanksgiving Day.

Anyhow, the interesting thing about this is that while we often hear that small businesses are the backbone of the American economy, and that they really do employ more Americans than anyone else, they really don't get very much attention from anyone. They aren't the focus of big retail frenzies, and they are pretty much ignored in real terms by society and our governmental institutions. It shows how acclimated we are to the big retail, and big industrial, economy that we have. American Express, which isn't a midget by any means, deserves some praise for focusing the spotlight on them

I'm not going to go big into a detailed economic and legal discussion of our economy, but it is important to note that we've adopted an economic model that favors consolidation. Indeed, one of the ironies of our economic system is that even though we adopted this partially by accident, we've adopted it so completely that any discussion o fit usually brings in shouts of "Socialist", when in fact our system requires government maintenance and support to even exist. That's because, in spite of what we think, we don't have a capitalist free market economy, but a corporatist free market economy.

Now right away, I can see the hackles raise on the back row, but this is simply a fact. While we no longer have a managed economy, as we did from the 1930s through the 1970s, we don't have a true free market economy either, and our economy is state supported in a way we're so used to, we don't recognize it.

What we fail to recognize is that our economy is corporate capitalist, as we think of corporations as natural. Of course, they were not. Corporations are creatures of the state. We're used to the because they've been around so very long.

The essence of corporations is to take what would be naturally a partnership, business combinations of more than one person (although we now even recognize one person corporations) and treat them as a legal entity unto itself. By this means, the partners become shareholders and those shareholders are insulated against personal liability for the actions of the entity. That's radically different from partnerships, where in their conventional form each partner is liable for the actions of the corporation. The corporation, in turn, is regarded as a "person" under the law.

This system strongly favors consolidation, as it favors the growth of business entities by shielding the owners of those entities from liability. It'd be extremely doubtful, for example, that Walmart would have grown to its present massive size if the owners of that company were each individually exposed to liability. I very much doubt it. But because of that liability shield, corporations can grow massive, distribute their profits to their shareholders, and except where the shareholders work for the entity and commit a tort or breach within it and for it, their own assets are never exposed.

Corporations aren't new by any means, but their role in the local economy is relatively new, and well within the time frame of this blog's focus. Indeed, determining exactly when corporations arose is really difficult, as there are various competing claims to that title, but they've been around for a long time. At least in the Western world, those early corporations were different from the current ones, however, as they typically had royal charters which either simply licensed them to operate, or in some instances conferred upon them a monopoly on certain activities. So, in the mercantilist economy that preceded the American Revolution, corporations were basically anti competitive.

No matter who may be the oldest, it's pretty clear that the oldest ones that mattered early in our history were those organized in the United Kingdom basically for monopolistic or trading purposes. One such entity, that still survives, was the Hudson's Bay Company, a giant in its era that owned darned near half of North America north of Spanish America. That company's reach was so vast and so long that when The Corps of Discovery went to look for a route to the Pacific, what it was really doing was covering a vast stretch of ground that the Hudson's Bay Company was already managing as part of its corporate empire. Really, HBC was a pretty darned good sport about it. Another giant was the East India Company, which controlled much of the trade in the English speaking world that plied the seas, and of course controlled the tea market to American displeasure. Even colonial enterprises, early on, were often a sort of chartered merchanilist enterprise, so none of this was regarded as odd or unusual at the time.

By the time of the Revolution Americans were displeased with this sort of thing and we didn't have any real big corporations for a while, but those that did arise were basically big fur trading enterprises that were in competition with the Hudson's Bay Company. HBC was already a model, so organization for corporate enterprises into the vast West were already established as a successful model. Today we tend to look back on the trappers and mountain men as wild aboriginal free agents, and to some extent that's true, but in reality they were also the working end of vast corporate enterprises.

None the less, corporations as a major factor in the American economy didn't really get rolling until the Industrial Revolution hit our shores. Before that, most people were some sort of yeoman really.

The Industrial Revolution changed all of that, and by necessity. After all, large scale manufacturing isn't really well suited for privately owned enterprise, even though you can find rare, and they are rare, exceptions. It took the corporate form to build big foundries, big smelters, big factories, and the like. So with the Industrial Revolution, came in the corporation.

With that, came a whole host of other concerns and problems, including the separation of workers from their employer, and all that goes with that. It also gave us monopolistic behavior, which previously had been encouraged by governments but which was now seen as a threat. This gave us an entire era of struggle of one kind or another, with the government, in the Theodore Roosevelt era, stepping into control Capitol, and workers forming unions and even radial political movements in some places. Marx wouldn't have appealed much to a bunch of farmers (and indeed, he sure didn't to Russian farmers), but he did to workers on the European factory floor.

Still, what this really meant is that industrialization and industrial products came in, replacing smaller artisans to some extent, or even to a large extent in some industries, but also spreading material wealth, albeit highly unevenly. What it didn't do, at first, was to do much to how and where people bought things.

That came in slowly, as chain stores first popped up in the late 19th Century. But as communications and transportation improved in the late 19th Century, new chain retail stores and mail catalog stores came in. Golden Rule, J. C. Penny's, Woolworths', Montgomery Wards, and the like, all became staples of American life.

These stores were always in competition with local businesses, but for some reason, perhaps mostly just self restraint, or perhaps due to local laws, or perhaps simply due to other factors, they didn't entirely displace them. A big store like K Mart, for example, might sell a lot of the same items that local appliance store did, but they'd both still be there.

This too has changed over time, somewhat replicating the process that happened with manufacturing. Manufacturing reached a point where it formed trusts and combines that were anti competitive, and then the government had to step in and bust them up. Somehow, retail outlets have grown and grown to where now certain ones are such giants that they too have tended to squeeze out competition in many instances. Wal Mart is the classic example, which is such a giant that in recent years its been able to influence prices on the whole sale supply end as well as the retail end, and according to its critics its influenced the quality of some items, negatively, as well.

This is not to say that the slow erosion of small business is all due to Wal Mart or is all a recent phenomenon. But it has definitely occurred. By the mid to late 19th Century it was already well the case that certain items were manufactured industrially and remotely. Wagons and coaches, for example, weren't local builds, but made by national firms, like Studebaker. Home spun clothing gave way, although not fully, to manufactured clothing by the turn of the prior century. Horseshoes were made by large industrial firms. Firearms, which saw the first assembly line manufacturing in the United States in the 18the Century were largely made by large industries by the mid 19th Century. The trend, while not overnight, was definitely real. Including in retail. Grocery stores, which had all been local affairs, started to become less and less local by the mid 20th Century.

For the most part, while the disappearance of small local enterprises may have been locally lamented, its' only been recently in the United States when this has sparked real concern. Perhaps this is just because its gone so far, and now is stretching into areas that nobody ever considered possible, and perhaps also because we live at a time when it seems that an era when no local business at all is actually possible. It probably won't happen, but local business do have to constantly worry about a big national or international concern coming in and squeezing them out. A concern like that must have gave rise to the American Express campaign.

That campaign is sort of Distributist in its philosophical content, whether it realizes it or not. It's interesting to see that advanced by a national outfit however, particularly one that's a as big as American Express. Its uniquely American in some ways.

Distributism has been mentioned here before, but basically its a philosophy based on the principal of subsidiarity that holds everything should be centered on the smallest economic unit possible, down to the family if possible. First really advanced by European Catholic writers of the late 19th and early 20th Centuries as an alternative to Socialism and Capitalism, both of which seemed set to destroy the lives of the average man at the time, and later on which seemed doomed to expire in the crisis of European politics of the early to mid 20th Century, it has been used to some extent, and often by accident, in various countries here and there. It also varies from adherents to back a government sponsored variety, and who would probably ultimately attack the necessity of corporations being as broad as they currently are, to radicals who would espouse a variant backed by Theodore Roosevelt in his later years that would have seen large corporations be regulated as public utilities with state ownership of a certain percentage of shares, to those who take a softer approach and just urge that people should act with Distributist hearts in their marketplace choices. That latter variant is the most widespread in actual practice, if not in philosophical discourse, and its the approach that American Express, probably ignorant of that fact, urges.

Front piece from a book by G.K. Chesterton, who together with Hillaire Belloc, was one of the two primary champions of European Distributist thought. Belloc's and Chesteron's Distributism was focused on agrarianism, which isn't universally the case for all Distributist, and was focused on the very small scale indeed.

Well, its interesting to see this now become an established American movement. In that fashion, maybe it really is entering American public thought. Indeed, this seems to be how a lot of public thought enters to the American discourse, at least at first. There are "shop local" movements everywhere, which now even extent do people who "get to know your farmer". And there are anti big box adherents everywhere as well, indeed, I've met quite a few here and there. It's not like a revolution, by any means. Nor is it dominant in American thought at the present time, but it's surprisingly widespread.

Well, no matter what a person thinks of it one way or another, American Express deserves a little applause for its efforts, even from a cynic like me.

Lex Anteinternet?

This blog has been around since 2009. In the very first post, we asked the question: "What the heck is this blog about?"

Our answer to the question was: "The intent of this blog is to try to explore and learn a few things about the practice of law prior to the current era. That is, prior to the internet, prior to easy roads, and the like. How did it work, how regional was it, how did lawyers perceive their roles, and how were they perceived?"

We also noted: "Part of the reason for this, quite frankly, has something to do with minor research for a very slow moving book."

All of this is still true, but the focus of the blog has changed somewhat. It now focuses on the era from 1890 to 1920 in general, rather than on the law and lawyers specifically, although that may be far from obvious. It's also become the location where we comment on anything we feel moved to comment on.

We hope you'll feel moved to comment as well. While we moderate every comment, so as to weed out Spam, we greatly appreciate the comments where they are offered, and hope to see more.

Thank you for stopping in!

On This Day In Wyoming History

In addition to being the frequent blogger here, I'm also the author of On This Day In Wyoming History, a book cataloging the daily history of Wyoming. More on that book can be discovered by following the link.

I'm also the author of a number of articles that have been published by various journals, including The Wyoming Lawyer and Rural Heritage. Topics of my published articles range from legal and agricultural topics to historical topics.